Sales Drought Hits Ranches: Unreal Estate

BOZEMAN, Mont. (TheStreet) -- The 20,000-acre Sun Ranch, nestled among national forests and the Madison River in Cameron, Mont., is so vast that realtors rely on helicopters to show the property to prospective buyers.

The fact that the $42 million ranch once owned by actor Steven Seagal has been shown eight or 10 times and its brokerage, Fay Ranches of Bozeman, Mont., expects an offer in a week makes it rarer than the earth it sits on. It has been a tough year for Fay Ranches and other ranch sellers in the U.S., as inventory and prices seem miles away from reality.

Many of the $5 million to $25 million properties on the "recent sales" page of Fay's Web site date back to 2007, when revenues showed double-digit gains. This year, sales have been slow until the last two months.

The 7,000-acre Lane Ranch in Three Forks, Mont., which includes a six-mile stretch of the Madison River, originally listed for $22 million, but will close at $11.5 million on Sept. 1. While it reflects the nearly 30% slide in Fay's Rocky Mountains ranch market since 2007, the sale is keeping the company optimistic as it expands into Jackson Hole, Wyo., and Sun Valley, Idaho.

"Last week, I came home and for the first time in a few months I actually said to my wife that I had a good day at work," says Greg Fay, founder of Fay Ranches. "It's been a long time and we kept our heads down and kept swinging and, thankfully, it looks like there's a light at the end of the tunnel."